digiby

February 28, 2018

# How a Triangle can explain any Successful Business

A few days ago, I was teaching Geometry to my seven-year-old and the usual discussion on shapes came-up – squares, rectangles, circles, triangles, etc. and their respective properties.

I was dumbfounded and surprised and could not immediately justify a particular favourite shape. This got me thinking about different shapes and how they value in the business world. Venn diagrams (Circle), Flowcharts and organisation charts (rectangles), quadrants (squares) immediately came to mind and then finally it struck me – Triangles!!

The more I thought about triangles, the more I felt that Triangle is the one and only shape that can define successful businesses (or business concepts) in the simplest manner. At its core, a Triangle is a shape with three edges and three vertices. Though we can classify triangles based on sides (Equilateral, isosceles, scalene) or angles (right, obtuse, acute) – the three sides property is common across them all. From a business perspective, the three sides of a triangle can represent three primary or dominant factors that are related to or interact with each other in multiple ways to make any business successful. Thus a simple ubiquitous Triangle can fit and help explain (almost) any successful business.

# Here are top 10 cases that (I believe) exemplify the “Triangles” in a successful Business:

## 1. B2B Marketing & Sales Funnel:

A typical B2B Funnel can be broken into three main stages – Lead and Demand Gen activities driving prospects and opportunities towards becoming repeat customers. Successful B2B models focus on increasing the inflow of quality leads into the pipeline and higher conversion to customers over time.

## 2. B2C Funnel (Online):

A B2C funnel for an online business focuses all energy on improving conversions from more visitors aware about products & services, getting them interested and finally purchasing products from their platform. This is in addition to other factors like repeat customers, avg transaction, frequency, etc.

## 3. Account Based Marketing (ABM):

A precursor to ABM is “Marketing Automation” that necessitates the alignment of Marketing/Mops/DG and Sales/Sops systems with people and processes to drive revenue increases. ABM – as Engagio’s Jon Miller says – is fishing with spears unlike fishing with a Net. Here in ABM, there are three broad steps – Target Accounts & contacts are identified, then using data, insights, and content, engaged & measured and finally conversion and customer advocacy that leads to higher average ARR.

## 4. Banks

This is probably an over-simplified explanation of primary functions of a bank. Basically, banks hold deposits, issue credit and manage Risk. There may be different instruments and channels via which deposits, credit and risk can be stored, managed, traded, etc. over periods of time. The above maybe bordering on being incorrect but I guess my friends and ex-colleagues from Chase or PayPal can correct me.

## 5. Card card networks:

Again realistically card networks (Visa, Master, Amex, etc.) have multiple parties involved in a given transaction and the respective fees charged by each – but the three main parties are the issuer bank, acquirer bank, and payment network.

## 6. Payment system (online):

All online payment systems (like PayPal, Stripe, Apple Pay, Alipay, etc) enable e-commerce or mobile app commerce using traditional card networks. But for widespread global adoption, profits and high transaction volume, they need consumers and merchants to select them for payment and developers to integrate them into websites and apps.Some of these online payment systems have also moved into offline/retail transactions either with dongles or NFC.

## 7. New Age “Digital Disruptor”:

Most of the new age “Digital Disruptor” companies (like Uber, Airbnb, FB, Alibaba, etc.) have become successful in the last 2 decades using technological innovation – but they do not own any assets (inventory), to provide the app / UI / Platform for a fee and link millions of global users.

## 8. Smartphone OEM:

Smartphone OEMs (that are profitable) tend to be the ones that have a high level of vertical integration or ownership of the hardware and software OS. (Think Apple, Google/HTC and to a smaller extent Samsung). The entire smartphone business model is based on the trifecta of hardware/software integration, mobile network /distribution (that effects pricing due to subsidies) and Apps. The successful ones are those that are able to exert control on all three.

## 9. Media (All):

All Media companies – from old to new media – function primarily using content, distribution, and monetization. In some cases (think Google), they don’t own content but rely on UGC (user generated content) while controlling distribution and ads/subscription. Others like Comcast or Time Warner control all three. When I look at the last 2 triangles, I wonder whether ATT’s motivation to buy TWX is improving 2018 margins by starting to integrate premium Content (HBO, DC universe, NFL, etc.), distribution (DirecTV, mobile), premium advertising (higher rates), & paid apps to consumers who want to bundle everything and save. This would allow them control over 5 of 6 sides from two Triangles!Finally, this last one is likely true across ALL companies in ALL industries…

## 10. Corporate Success:

Corporate success depends on a balanced mix of Strategy, Execution, and Culture (of the people involved). There are many good articles on HBR, Wharton and Medium extolling the virtue of whether Strategy with execution or Strategy with culture brings success, but IMHO with people involved in every facet of business, all three are equally critical for any successful business – Strategy, Execution and Culture. Read more…